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Home / News / India /  Govt pegs 1.20 trillion disinvestment collection in 2020-21

The government on Saturday pegged disinvestment target for 2020-21 at 1.20 trillion, nearly double of 65,000 crore it expects to raise in the current financial year.

The government has missed the budgeted disinvestment target of 1.05 trillion set for the current financial year by a huge margin.

In the current financial year so far, the government has mopped up about 18,000 crore by way of disinvestment. The revised estimate pegs disinvestment proceeds at 65,000 crore for this fiscal ending March 2020.

For the next financial year, beginning 1 April, the government expects a substantial 90,000 crore revenue from disinvestment of government stake in public sector banks and financial institutions. This would help the government achieve the 1.20 trillion total disinvestment proceeds for 2020-21.

Finance Minister Nirmala Sitharaman in her 2020-21 Budget announced selling of part government stake in insurance behemoth Life Insurance Corporation (LIC), beside selling the balance holding of the government in IDBI Bank to private, retail and institutional investors.

"In the last few years, the government has taken concrete steps to bring our banking system to be robust. However, there is a need for greater private capital. Accordingly, it is proposed to sell the balance holding of Government of India in IDBI Bank to private, retail and institutional investors through the stock exchange," she said in her Budget Speech.

The government currently holds 47.11%, while LIC is the majority shareholder holding 51% stake in IDBI Bank.

In August last year, the Cabinet approved selling the government's controlling stake in IDBI Bank to LIC, which is currently 100% government-owned.

Sitharaman in her Budget Speech also proposed listing of LIC on the stock exchanges through an initial public offer.

"Listing of companies on stock exchanges discipline a company and provides access to financial markets and unlocks its value. It also gives opportunity for retail investors to participate in the wealth so created. The government now proposes to sell a part of its holding in LIC by way of initial public offer (IPO)," she said.

In the financial year 2016-17, the government had missed the budgeted disinvestment target. While the Budget had pegged target at 56,500 crore, the government was able to mop up 46,247 crore.

In 2019-20, after a gap of 2 years, the government has missed the disinvestment target set in Budget.

In 2017-18, it bettered the target of 1 trillion and raised a record 1,00,056 crore. In 2018-19, the disinvestment mop-up stood at 84,972 crore as against the Budget target of 80,000 crore.

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